Suppose the Majority of Students Who Are Graduating in May

question 126

Multiple Choice

Suppose the majority of students who are graduating in May from a large university have found jobs and signed employment contracts by February.Starting in February,these students are likely to __________ spending and __________ saving.

• A) increase; increase
• B) decrease; decrease
• C) decrease; increase
• D) increase; decrease
• E) not change their rate of; not change their rate of

---

Definitions:

Inferior Good

A good for which an increase in income reduces the quantity demanded

Good A

A placeholder term typically used in economic models to represent a generic item or service in the market.

Income Falls

A situation where an individual's or group's earnings decrease over a period of time.

Normal Good

A good for which an increase in income raises the quantity demanded.